Region's defense base wary of potential cuts

New London — The superintendent of the U.S. Coast Guard Academy said Friday she is postponing hiring new employees because of the threat of automatic spending cuts.

"We're trying to maintain and be aware that there's a lot of uncertainty out there," Rear Adm. Sandra L. Stosz said. "It causes us angst."

The Chamber of Commerce of Eastern Connecticut met Friday at Lawrence & Memorial Hospital to discuss what's at stake if $1.2 trillion in automatic spending cuts — known as sequestration — take effect Jan. 1, and how the process could unfold.

U.S. Rep. Joe Courtney, D-2nd District, briefed the group, telling them that while he believes there will be some sort of a resolution after the presidential election to prevent the "chainsaw," southeastern Connecticut would feel the impact "if reasonable people don't get together to find a compromise.

"We're here with a ticking clock," he said.

Several at the meeting said the "shadow of uncertainty" sequestration casts will influence local entities' decisions on staffing and investments.

The uncertainty is "like cancer" and could affect small firms statewide, said Bob Ross, executive director of the state's Office of Military Affairs. "The sooner it gets resolved, the better," he added.

After sequestration was used in 1985 to force a compromise on deficit reduction, Stosz said, the Coast Guard moved the Leadership Development Center to New London to "hedge against the threat" that the academy could be cut. Today, she said, the academy is modernizing, renovating and trying to expand.

Stosz said she's hoping the academy can continue to "deliver value to America" and hoping America will realize that value so the academy will remain intact even as the budget is cut.

Tony Sheridan, president of the Chamber of Commerce of Eastern Connecticut, said sequestration "impacts everyone," which is why he wanted to meet on the topic to educate people.

Because the automatic budget cuts do not allow for prioritizing, Electric Boat would face changes to its submarine construction and design programs if the cuts occur.

The Navy would have to cut about 50 ships and submarines from its inventory if Congress allows sequestration to go forward, resulting in a 235-ship Navy that is 78 ships short of what the Navy has said the nation requires, Sen. Joe Lieberman, D-Conn., said in July.

But EB spokesman Robert Hamilton said after the meeting that it's "business as usual" at the Groton shipyard.

The secretary of defense repeatedly has said sequestration would be devastating and the department is not planning for it. Half of the cuts would come from defense.

"If the DOD doesn't plan for it, what can we plan for?" Hamilton said. "It's business as usual until we're told otherwise."

There are 50,000 defense-related jobs in Connecticut and defense industries have a $25 billion statewide annual economic impact, accounting for 10 percent of the state's economy.

While the defense industry is often the focus of the concerns over sequestration, Courtney said cities including New London and Norwich would receive less federal education funding, Medicare reimbursements would take a hit and the Department of Labor would serve fewer job seekers in Connecticut.

"That's why we have to diffuse sequestration and come up with a balanced resolution," he said.

To do so, the president and Congress could enact a replacement deal into law, postpone sequestration, or retroactively restore the cuts after sequestration is triggered.